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Ginni Rometty to Step Down as C.E.O. of IBM Ginni Rometty to Step Down as C.E.O. of IBM
(32 minutes later)
Ginni Rometty, the longtime face of IBM and one of the country’s most prominent female business leaders, is stepping down as chief executive, the company said on Thursday.Ginni Rometty, the longtime face of IBM and one of the country’s most prominent female business leaders, is stepping down as chief executive, the company said on Thursday.
Ms. Rometty, who became chief executive in 2012, struggled to achieve growth at the technology giant as it made the transition to new fields like cloud computing and artificial intelligence.Ms. Rometty, who became chief executive in 2012, struggled to achieve growth at the technology giant as it made the transition to new fields like cloud computing and artificial intelligence.
She will be replaced in April by Arvind Krishna, who now runs the company’s cloud computing business.She will be replaced in April by Arvind Krishna, who now runs the company’s cloud computing business.
The timing of the departure of Ms. Rometty, 62, came as a surprise, made after the close of the market on Thursday in a lengthy statement filled with praise from IBM’s board. She will remain as executive chairwoman of the board until the end of the year.The timing of the departure of Ms. Rometty, 62, came as a surprise, made after the close of the market on Thursday in a lengthy statement filled with praise from IBM’s board. She will remain as executive chairwoman of the board until the end of the year.
Ms. Rometty was one of the top women executives in the corporate world, a frequent speaker at conferences, and liked and admired by her chief executive peers.Ms. Rometty was one of the top women executives in the corporate world, a frequent speaker at conferences, and liked and admired by her chief executive peers.
Her assessments of the challenges facing IBM, an old-line technology company making a difficult transition, were cleareyed and candid. In an interview in 2014, for example, she said the next couple of years would be a “rocky time” for IBM.Her assessments of the challenges facing IBM, an old-line technology company making a difficult transition, were cleareyed and candid. In an interview in 2014, for example, she said the next couple of years would be a “rocky time” for IBM.
But the failure to reach the crossover point — when the growth of the new businesses like cloud computing, data analytics and artificial intelligence grew faster than older hardware, software and services business — frustrated Wall Street. During her tenure, IBM’s stock price slipped at the time when the stock market in general rose sharply.But the failure to reach the crossover point — when the growth of the new businesses like cloud computing, data analytics and artificial intelligence grew faster than older hardware, software and services business — frustrated Wall Street. During her tenure, IBM’s stock price slipped at the time when the stock market in general rose sharply.
Shares in the company rose more than 4 percent in after-hours trading.Shares in the company rose more than 4 percent in after-hours trading.
Yet even Wall Street analysts who were often critical of IBM’s performance during her leadership acknowledged that she had inherited key challenges. IBM, they note, was slow to adapt to cloud computing — computing tasks done on remote computers, owned by others. The leaders have been Amazon and Microsoft, and Google is pushing hard to capture that corporate business as well.Yet even Wall Street analysts who were often critical of IBM’s performance during her leadership acknowledged that she had inherited key challenges. IBM, they note, was slow to adapt to cloud computing — computing tasks done on remote computers, owned by others. The leaders have been Amazon and Microsoft, and Google is pushing hard to capture that corporate business as well.
“She came in at a particularly tough time, and that challenge was handed to her,” said Toni Sacconaghi, an analyst at Bernstein Research.“She came in at a particularly tough time, and that challenge was handed to her,” said Toni Sacconaghi, an analyst at Bernstein Research.
In August 2019, IBM bought Red Hat, the largest distributor of the popular open-source operating system Linux, for $34 billion. At the time, many analysts said that the deal meant that Ms. Rometty would probably stay on until the end of this year. But her two predecessors, Samuel J. Palmisano and Louis V. Gerstner Jr., both retired at 60.
The acquistion of Red Hat seems to be going well, analysts said. James Whitehurst, the chief executive of Red Hat, was named the president of IBM on Thursday.
Last week, IBM reported a slight increase in revenue. “This positions us for sustained revenue growth in 2020,” Ms. Rometty said at the time.
Other than Red Hat, IBM acquired 65 companies under Ms. Rometty, mostly small ones. And she sold off companies that accounted for $9 billion in yearly revenue, including semiconductor manufacturing and several lower-profit services and software businesses.
“It’s been her eight-year project to reposition the company,” said Frank Gens, chief analyst of IDC, a technology research firm. “And after the positive report last quarter, she’s declared victory and retired.”
This is a developing story. Check back for updates.This is a developing story. Check back for updates.